CLC-Steps Required for Financial Recommendations

CLC - Mission and Vision Statements Analysis and Company Overview

 Jose Alonso, Tamberlyn Crayton, Dinaja Dowdy, Pauline Morgan, and Brad Overson Comment by Daniel Smith: Team - excellent work in regard to both academic writing and also well-developed content. Dr. Smith

Colangelo College of Business, Grand Canyon University

MGT 660: Strategic Management

Dr. Daniel Smith

April 28, 2021

Company Overview

Starbucks is a coffee company that is well known across our nation and in many parts of the world. Their presence is represented in grocery stores, airports, retail locations, and their stand-alone restaurant locations. With drive-thru service and being able to place an order through their application, available on all smartphones, they can provide a convenient service to their customers quickly and efficiently. Starbucks takes pride in being a 99% fair trade company and providing great products and customer service.

History

Founded in 1971 by Gordon Bowker, Jerry Baldwin, and Ziv Siegl, Starbucks is known to be the #1 coffee retailer with 32,660 coffee shops around the U.S. Headquartered in Seattle, Washington, Starbucks operates through America, including Canada and Latin America, which generates 70% of total revenue. Internationally, Starbucks is in China, Japan, Asia Pacific, Europe, Middle East, and Africa— generating over 20% of the company’s revenue (Starbucks Corp., 2021). Looking closely at the product’s standpoint, Starbucks generates 60% of its revenue from selling beverages, approximately 15% from food, and almost 25% of the revenue is impacted by other items (Starbucks Corp., 2021). The selling of food items includes roasted beans, coffee accessories as well as teas. Comment by Daniel Smith: Excellent summary of the business model and history of the organization - clearly written and well-developed content.

Strategy and Business Model

Starbucks uses marketing techniques through grocery stores and food service customers to build its impeccable reputation. Their branded products, such as bottled Frappuccino, are sold by food manufacturers through their partnership deals. Some third-party retailers generate about 10% of the company’s revenue through a process called channel development (Starbucks Corp., 2021). These operations include selling coffee beverages, single-serve food products, and merchandise through company-operated and licensed stores (Starbucks Corp., 2021). This strategy is solely based on expansion. Starbucks seeks to emphasize global retail business. To increase its category share in a disciplined manner, they selectively open stores within existing markets (Starbucks Corp., 2021). This has been Starbucks’ long-term strategic objective to remain one of the most recognized and respected brands in the world. Another strategy that is used by the well-known brand is digital adoption. Starbucks’ investment in technology establishes partnerships with third parties with relevant expertise to increase digital adoption (Starbucks Corp., 2021). By doing so, they provide convenience and elevate the customer’s experiences. These are great tactics that this company uses to stay on top. Comment by Daniel Smith: Good analysis of the business model.

 Company Vision and Mission Statement

OUR MISSION: To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time (Starbucks, 2021).

OUR VISION: To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow (Gregory, 2019).

Strengths and Weaknesses

A definite strength that Starbucks’ mission statement portrays, is direct contact with the customer. Since consumer needs and desires are at the core of marketing strategy, mission statements written from a customer perspective could help with the implementation of marketing strategy (David et al., 2014). Having the ability to reach further with marketing through the mission statement will increase the effectiveness and ultimately should increase profits.   Starbucks’ mission statement is rather short (less than 100 words) and very direct towards the customer. According to David et al (2014), it is lacking several components needed to maximize its effectiveness. The mission statements show a lack of concern for the company’s employees, technology, and its concern for growth and profitability (David et al., 2014).

The Vision statement has a great leading statement of showing that they are striving to mark themselves as a purveyor of the finest coffee in the world. This is a definite strength that shows the direction they are heading with their product.  That statement shows that they will be constantly refining their abilities to become better.  However, on the other side, the vision statement continues to state that Starbucks will maintain its uncompromising principles. Utilizing the word ‘maintain’ does not depict any growth, it states uncompromising principles, but everything changes with time, and if there are no plans for improvement, as the world changes there will not be any progress in this department. Not having a vision of progression has the potential to hurt employees. Russel Lolacher (2016), noted that employees will not be as inspired in their work, possibly leading to a lack of initiative beyond their “job description” and will see a lack of vision as a lack of leadership for the organization. All the vision’s lacking should be addressed for the company to continue its current goal of being an industry leader.

New Vision and Mission Statement

NEW MISSION: Striving to serve the world, one cup at a time, with inspiration that is nurtured by our commitment to the conservation of our environment, supporting our employees, and giving back to our communities. Comment by Daniel Smith: Well-developed content for both of these statements - excellent.

NEW VISION: To establish Starbucks as the premier purveyor of the finest coffee in the world, by supporting fair trade and focusing on our principles to better our environment and those around us, as we continue to grow.

Benefits of the new Statement

An effective mission and vision statement need to be changed over time, to fit the changes going on with the company and the world. The current mission and vision statements are good but needed to be updated to encompass more aspects of the business and to reflect the current trends and evolution of time. The new mission and vision statement include many of the core values of the company. There is a specified focus on the employees and the surrounding communities which shows them that the company has a vested interest in them. Both the mission and vision statements speak about the commitment to the environment that Starbucks honors. They are much stronger statements that represent the company and gives the public a better sense of what they are about. Comment by Daniel Smith: Clearly articulated rationale for new statements.

References:

David, F. R., David, F. R., & David, M. E. (2014). Mission Statement Theory And Practice: A Content Analysis And New Direction. MissionArticle.pdf-file.pdf (strategyclub.com)

Gregory, L. (2019). Starbucks coffee’s mission statement & vision statement (an analysis). Management. http://panmore.com/starbucks-coffee-vision-statement-mission-statement

Lolacher, R. (2016). Benefits And Dangers Of A Vision Statement.  Benefits and Dangers of a Vision Statement - Russel Lolacher

Starbucks. (2021). Company. https://www.starbucks.com/about-us/company-information/mission-statement

Starbucks Corporation: Company Profile. (2021). Vault. https://www.vault.com/company-profiles/retail/starbucks-corporation#:~:text=Company%20Background,whole%20bean%20and%20ground%20coffees.