Reaction to Starbucks Case

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Ann Dittrich___Strategic Human Capital Management___John McClendon___ Fox EMBA___4.23.2012 Reaction Paper___Starbucks: what role does firm culture play in fulfilling Starucks’ Value Proposition?

Starbucks’ Value Proposition is three-pronged: to provide premium coffee with excellent service in an upscale coffeehouse environment. Their multi-dimensional focus on ethical practices plays an integral role in achieving this…

Both ends of the value chain are considered vital to Starbucks’ commitment to offering premium coffee. Much attention is paid to the supply end of the value chain, as executive Dub Hay quotes, “It is how we buy coffee that makes Starbucks special”. Through their Shared Planet initiative, Starbucks has ensured that farmers receive fair prices for their products, and they’ve worked to improve the ecological impact of coffee growing by partnering with Conservation International. The other end of the supply chain benefits from their culture as well: Starbucks’ refusal to franchise is based on the firm’s goal to ensure the best product possible, and franchising would effectively sever Starbucks’ ability to deliver on this promise.

Excellent service is also achieved through the rich firm culture that Starbucks embodies. The intensive training that baristas receive ensures that customers will get individual attention and if they are a repeat customer, the barista may even remember their preferences and their name. This attention to service comes through a sense of intrinsic satisfaction that Starbucks employees share, and is quantifiable in the fact that Starbucks’ turnover rates are 120% lower than the industry average. A strong sense of contribution is fostered through Starbucks’ respect for its employees (referred to as “partners”), who are encouraged to provide feedback on ways to improve their customers’ experience. The high degree of value that Starbucks places on their partners is further evident in the fact that health care...
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