Management Policy & Strategy

Management Policy & Strategy



Management Policy & Strategy

Starbucks Corporation, founded in 1971, is a retailer of specialty coffee. Starbucks retails a variety of drip brewed coffee, espresso-based hot drinks, other hot and cold beverages, complementary food items, coffee-related accessories and equipment, teas, ice cream, and items such as mugs, coffee beans, and music and other non-food products through retail stores in approximately 39 countries worldwide. The company operates primarily in the US. It is headquartered in Seattle, Washington and employs about 150,000 people. Starbucks mission is “To inspire and nurture the human spirit— one person, one cup, and one neighborhood at a time” (www.Starbucks.com). Top management believes in involvement in the activities of the corporation and employees enjoy unsurpassed benefits in the industry.Schultz strongly believes that Employee satisfaction is directly related to customer satisfaction.

The company recorded revenues of $7,787 million during the fiscal year ended October 2006, an increase of 22.3% over 2005. The operating profit of the company was $894 million during fiscal year 2006, an increase of 14.5% over 2005. The net profit was $564.3 million in fiscal year 2006, an increase of 14.1% over 2005. Its very strong financial position allows it to expand aggressively domestically and internationally.

Situational Analysis

In regards to the coffee bean market, although it has endured much criticism for its purported monopoly on the global coffee-bean market, Starbucks only accounts for roughly two percent of global coffee production. According to Starbucks, they purchased 4.8 million pounds of Certified Fair Trade coffee in fiscal year 2004 and 11.5 million pounds in 2005.

Although Starbucks has seen their market share slip they can still obtain their goals by doing the following:Streamline their product line and get back to their bread and butter quality coffee with premium service. 

Continue to promote their green initiatives. These have ...