Management Presentation

By George Gorham

A Brief History and Founding

Initially the company was to be called

Pequod, after a whaling ship from Moby
Dick, but this name was discarded by some
of the cofounders. The company was
subsequently named after the chief mate on
the Pequod, Starbuck.
In the early 1980s Howard Schultz, vice
president of Hammerplast USA, noticed that
Starbucks was purchasing a considerable
amount of his companys espresso
machines. This caught his attention so he
decided to take a look at this business for
himself. When he arrived in Seattle, he

found out that there were four locations in

operation. He later discovered that the
Starbucks owners were interested in selling
their stores, so he purchased the chain for
$3.8 million and combined them with his
own coffee shops.
Today, Starbucks is one of the most
successful coffee store chains in the world.

The first Starbucks opened in Seattle,

Washington, on March 30th, 1971 by three
partners who met while they were students
at the University of San Francisco: Jerry
Baldwin, Zev Siegl, and Gordon Bowker. They
were motivated to sell high quality coffee
beans and equipment which came from a
coffee roasting entrepreneur Alfred Peet after
he taught them his style of roasting beans.

Starbucks CEO Howard Shultzs

Management Style

Howard Schultz has and

continues to implement a
positive, though unorthodox
management style in order to
achieve organizational success.
To put this into context, Shultz
takes on a proactive stance
through having a high sense of
social responsibility. This
managerial technique has given
Schultz says that the best corporate leaders
Starbucks a competitive edge. It
combine two qualities: A steadfast confidence is unusual for a CEO to have
in the vision that guides their business and
such strong responsible
the ability to influence employees to partake
management principles and to
in the achievement of this vision. In this
implement them with as much
regard, he stresses that once the vision has
conviction as Schultz against all
been defined it is important not to confuse
odds.
strategies and tactics.

Starbucks CEO Howard Shultzs

Management Style Contd
From the beginning, even when Starbucks was losing money,
Schultz decided to provide all employees (even part-time)
with two benefits: Comprehensive health insurance and
stock-options. This helped the company to attract talent and
build a relationship of trust with employees. Schultz
explained that a professional occupation should be
something personal for everybody, not just the entrepreneur.
Their work should also make sense to the accountant, the
worker and the secretary. However, for them to love what
they do, their company must love them. This principle has
always guided Schultzs management style. So when
Starbucks went through the worst crisis in its history and
Schultz was subjected to all kinds of pressure to put an end
to the health care benefits and stock-options enjoyed by his
employees, he did not yield he didnt want to sacrifice
Starbucks values for the sake of its financial performance.
He finally managed to reconcile the two.

Starbucks CEO Howard Shultzs

Management Style Contd

SomeReasons
ReasonsWhy
Why Starbucks
Starbucks isis
Some
Competitive
sosoCompetitive
As previously discussed, Starbucks is prepared to lose money in
the short run to overcome potential rivals. For example,
Starbucks opens in high concentration or clustering areas in small
districts. They then sell at prices which put financial strain on
small coffee shops.
Starbucks has a wide range of products. It is appropriate to say
that the Caf Delsol does good coffee and other beverages (or
possibly bad in another persons opinion), but do they have as
much variety as Starbucks 87,000 drink combination
possibilities? Enough said, if you want it, Starbucks has it.
Howard Schultzs attention to detail has given him an intense
level of focus on things which most firms would consider to
be unimportant. For example, the tables are round to prevent
customers who dine alone from feeling lonely and they are
also comfortable and informal for groups of people, to sit at.
The cups are mobile advertising billboards. The language of
Starbucks cup sizes of tall, venti and grande, are to cultivate a
somewhat club atmosphere, where customers feel like
members. Starbucks is obsessive about conducting customers
surveys on everything from the music to the dcor to the
restrooms.

Starbucks Critical
CriticalSuccess
Success Factors
Starbucks
Factors
Quality of Products
Increasing competition in the market
is fueling the amount of customer
expectations regarding the quality of
goods in general, and freshness in
particular. No matter where in the
world you are, if there is a Starbucks
around, its products will remain very
similar in quality.

Customer Services
Excellent customer services are
adopted as an important source of
having a competitive edge.
Starbucks continues to increase the
amount of shops to meet their
customers high demand for their
products and services.

Starbucks Critical Success Factors

Contd

Working at Starbucks

The End