STARBUCKS SOCIAL RESPONSIBILITY

Starbucks Social Responsibility

Starbucks Social Responsibility

Company Overview

Starbucks have a privilege to be connected with millions of customers around the globe who came to Starbucks for its premium quality coffee. Its product range includes; coffee, handcrafted beverages, merchandise (including equipments for coffee and tea brewing), freshly baked food (sandwiches, pastries, fruit cups, etc.). Products other than these are available only in Starbucks selected countries. Its brand portfolio includes, Starbucks Coffee, Tazo Tea, Seattle's Best Coffee and Torrefazione Italia Coffee. Startbucks mission is:

“To inspire and nurture the human spirit - one person, one cup and one neighborhood at a time.”

Regardless of its popularity and success, Starbucks always remain one hand forward in adopting plans which will benefit the communities and environment of not only its country of origin, but, also in those countries where its stores are located (Starbucks, 2011).

Case Analysis

As per instructions this case would be analyzed based on the American Management Association's 8 ways of solving and analyzing a problem. These 8 steps include:

Discovery

Starbucks started to make profit approximately after sixteen years of its establishment when Howard Schultz bought it. Now, Startbucks have 13,500 stores in 40 countries with annual revenues exceeding $7.8 billion. According to Schultz, their goal is to open 40,000 stores and bring their profit to a mark of $23 billion by the end of 2012. In response to the efforts of Starbucks, started in affiliation with NGOs on the issues of corporate social responsibility, a leading NGO Global Exchange pointed on the firm that it was not doing its best in terms of fulfilling its corporate social responsibility. Since, global exchange also led the campaign of Nike's sweatshops in China during the 1990's, and the major concern behind it was to establish Fair Trade, it threatened Starbucks for the same reason, regardless of the fair trade deal which Starbuck was about to Sign with Trans Fair USA, a third party licensing organization, in the year 2000.

Analysis

The main problem which seeded this issue was Global Exchange's demand to raise the price of coffee which Starbucks used to pay to the farmers. They were asking Starbucks to set a minimum price of $1.26 per pound of coffee, where Starbucks was already paying $1.20 to its farmers. Regardless of the market price, which was 64¢at that time, the NGO continued to threat Starbucks. It made every possible effort decline the image Starbucks had in the market; these include showing a documentary of child labor in the Guatemalan coffee farms, raising the issue in Starbucks shareholders meeting. Thus, threatening the firm very openly that it should meet the demand of Global Exchange or otherwise it would lead a nationwide campaign against Starbucks.

Deeper Analysis

Fair Trade Coffee

The term fair trade coffee refers to the direct purchase which the company makes from cooperatives of small farmers at a fixed price. Unlike other coffee types, fair trade coffee focuses only on the economic sustainability of the farmers. In this regard, fair trade coffee disintegrates the middleman from the supplier chain of coffee and provides ...