1. 2. 3. 4. 5. 6. 7. 8. 9. Executive Summary Introduction Problem/Issue statement Data analysis Key decision criteria Alternatives analysis Recommendations Action and Implementation Plan References 2 2 3 4 6 6 7 7 8
The purpose of this report was to examine the four problems that Starbucks is facing and then find out a way to solve these problems. By analyse these issues, the business’ strategies and the processes of the company will be evaluated. Starbucks’ way of operatiing and how its operation produces the desired outcome will be analysed, in order to find out the company’s major problems and looking for ways to solve these problems. Finally, based on the analysis, recommendations about the strategic change will be given to enhance the performance of the company. In the end, this report will make an action and implementation plan.
Organisation needs to implementing strategic changes within the organisation to conform the outside environment. Business organisations should be perpared to change at all the times to stay active and remain alive (Abrahamson 2000). Every company should adapt this realisty no matter which industry they are involved in. Starbucks has been the leader in the coffee industry for a decade, however, it still facing some problems that need to be improved.
There appears four major problems in Starbucks which are: firstly, when the company expanded its size rapidly, it started to have financial strength due to its policies and high human resource costs; secondly, the company’s reputation has decreased as there were some saying that the company had stopped taking care of its employees, and one example is that Starbucks was anti-union and forbid any employee union activities; thirdly, there were complaints about Starbucks’ benefits programs as the company was not benefits its employees which can be seen as it did not covering the costs of employees’ work related injuries and the low raises (60 cents per hour); Finally, the company is facing threats from other competitors if they do not consider their future recruiting prospects, then the company may lose some good employees. The immediate issues that can be addressed here are the first three problems showed above and the last one the bigger issue which need to be addressed in the future. The first and the third problem are more urgent than the fourth problem, because the first one has already effected on the company’s profitablility as it started to experiencing financial strength and the second and the third problems are about strategic directions of the company and the morale of its employees, if the company do not solve these peoblems immediately, the company might facing some difficulties from its people; whereas the fourth problem are relatively less urgent as the first three problems as it depends on the future development of the company. The issues are relavant to strategic human resource management as SHRM is about systematically linking people with the organisation and more specifically it is about the integration of HRM strategies into corporate strategies (The Aston Centre for Human Resources 2006, p.14). Therefore, why did Starbucks’ profit decline? What happened to its operational model? How did these happen? All of these are the questions that need to be solved.
The issues stated aboved are caused through three components: its products, employees the company hired and the processes which the company use to conduct its services. First of all, Starbucks’ expansionism of its own principle is one of the reason for its decline, which can be seen as its overpriced coffee products. Starbucks’ chain stores are becoming more likely to be fast food chains which shifted its customers to its competitors who sell the same products as lower prices. Secondly, Starbucks is facing financial strength as the company spent more on its human resources than...