Brand Evaluation

Marguerite J. Breckheimer

University Of North Dakota

COMM 451: Risk and Crisis Communication Dr. B

November 10, 2023

Following Starbucks racial bias crisis that occurred at one of their Philadelphia locations on

April 12, Starbucks immediately jumped into action as they saw the threat to their companies

reputation. Two days after the incident, Starbucks posted a public apology. The apology

recognized the incident and mentioned that they would be reviewing their policies to prevent

situations like these from happening again. Many found this apology to be unmeaningful and

generic considering the seriousness of a racial bias issue. An article by Sarah Larson that

discusses the lessons that can be learned from this crisis says, “The short, impersonal statement

did nothing to reassure the public that the company was taking the incident seriously” (Larson,

2019). The media reacted to this apology by starting the hashtag “Boycott Starbucks”. The

following day, Starbucks CEO Kevin Johnson took to social media with a more personal

statement. He apologized for the situation and said, “You can and should expect more from us”.

In order to make the situation right, Kevin Johnson flew across the country to apologize to the

two men in person and let them have a say in how this issue could be solved. Johnson also met

with the city leaders to discuss ways they can prevent incidents like this from repeating

themselves. On Monday April 16th, Kevin Johnson made an appearance on Good Morning

America to make another public statement emphasizing Starbucks dedication to making this
situation right. Lastly, Johnson announced he would be shutting down 8,000 Starbucks locations

on May 29th to hold bias sensitivity training for employees. This had mixed responses as some

people found the training to be pointless while others thought it could help racial bias issues in

the workplace. Overall, Starbucks handled this crisis well with a few minor hiccups along the

way.

One way Starbucks could have improved their crisis management in this scenario would be to

get the initial apology out faster. Starbucks waited two days before putting out anything to the

public. According to Sarah Larson, “This happens quite often when organizations are still

gathering the facts to determine what had actually happened” (Larson, 2019). When a racial bias

incident occurs, it is crucial that companies respond almost immediately, as these crises can ruin

a company's reputation in an extremely short period of time. The fact that this crisis was brought

to social media adds another factor of urgency because things spread within seconds on social

media.

Next, I will be conducting a SWOT analysis on Starbucks as a company and their crisis

management skills following this racial bias incident.

Strengths

One major strength Starbucks holds is their customer loyalty and brand recognition. Starbucks is

a giant organization with millions of customers who buy their products daily. Starbucks created

one of the most successful customer loyalty programs to date. Their rewards app allows

customers to earn points that can be redeemed for free upgrades, food, beverages, and certain
merchandise. Customers can earn points in various ways including games, visiting the store

multiple days in a row, or simply by scanning the app when you pay. This system keeps

customers coming in frequently and promotes positive brand association. Another strength

Starbucks possesses is their large global presence. Starbucks has stores in over eighty nations

and is a worldwide name. Starbucks specially customizes the products in each region in order to

appeal to those specific customers. This widens their customer base and once again promotes

brand recognition.

Weaknesses

An article on how Starbucks handled this racial bias incident discusses how Starbucks is known

for their fast-paced working environment. Although it's great that Starbucks can get your coffee

out shortly, the article says, “This can translate to the company choosing quantity over quality”

(Avila et al., 2019). In other words, the busy and overwhelmingly fast-paced work environment

can leave room for errors such as this incident. Interactions may seem impersonal and rushed

when customer service should be one of Starbucks top priorities. Another weakness Starbucks

possesses is their high prices. If you want anything other than black coffee, you’re most likely

going to pay a minimum of five dollars. With customizations and upcharges, you’re looking at

an eight-dollar cup of coffee. Starbucks' constantly rising prices may cause customers to go to a

more affordable competitor or make their coffee at home. Another major weakness Starbucks

faces is their lack of options for people with dietary restrictions. Dairy and gluten allergies are

very common and can be life threatening. Although Starbucks offers a few non-dairy

alternatives, they have a long way to go until their stores are a safe option to those who have
gluten and dairy allergies or sensitivities. This can drive customers away and cause them to go

elsewhere where more options are available or make their coffee at home.

Opportunities

One major opportunity for Starbucks that was brought up in an article covering this racial bias

incident, is developing inclusive campaigns addressing minority groups to promote inclusivity

and expand their customer base. According to the article, “With tasteful campaigns or thoughtful

corporate responsibility motives, Starbucks has the global power to change a community through

their financial resources, large customer and employee base, or vast range of products” (Avila et

al., 2019). Essentially by developing these campaigns Starbucks can show their care for further

promoting diversity and inclusivity both in their stores and in surrounding communities. Another

opportunity for Starbucks would be to work and collaborate alongside other companies.

Starbucks is currently affiliated with companies such as Spotify and Teavana. Collaborating with

other companies in various industries is a great way to get Starbucks to be a topic of discussion

and drive sales.

Threats

Competitors such as Dunkin Donuts, Tim Hortons, and Caribou coffee stand as a threat to

Starbucks. All model a similar fast-paced work environment and serve their own specialty coffee

beverages. Starbucks must constantly update their menu and model exceptional customer service

in order to stay on top among other large competitors. Small local coffee shops with more

affordable prices and sustainable practices may also serve as a threat. A second threat that

Starbucks possesses is environmental risks. Starbucks makes a large carbon footprint with their
single-use plastic (cups, straws, food packaging, etc.). Starbucks needs to implement

environmentally friendly practices to run an ethical and sustainable business. The next

generation is extremely environmentally conscious, and these poor practices could drive them

away. A third threat Starbucks must face is their brand image. With this crisis, along with crises

from now and the past, Starbucks reputation is at risk. With such a large name, any negative

news about Starbucks has the power to blow up in seconds. Starbucks has to make sure they have

a good crisis management team and a thought-out plan on how to handle crises.
 References

admin. (2023, April 14). Starbucks SWOT Analysis. The Strategy Story.

https://thestrategystory.com/blog/starbucks-swot-analysis/

Avila, M., Parkin, H., & Galoostian, S. (2019). $16.7 Million to save One Reputation:

How Starbucks Responded Amidst a Racial Sensitivity Crisis. Pepperdine Journal of

Communication Research, 7, 4.

https://digitalcommons.pepperdine.edu/cgi/viewcontent.cgi?article=1108&context=pjcr

Larson, S. (2019, January 16). 7 crisis management lessons from the philadelphia

starbucks arrest. Furia Rubel Communications, Inc. https://www.furiarubel.com/news-

resources/7-crisis-management-lessons-from-the-philadelphia-starbucks-arrest/

The Starbucks Incident: a crisis management case study. (2018, May 18). Bernstein

Crisis Management. https://www.bernsteincrisismanagement.com/the-starbucks-incident-

a-crisis-management-case-study/#:~:text=Starbucks%20accomplished%20that%20by

%20immediately