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Starbucks Business Plan


Management and Organization Plan

Management Team
Recruitment and Selection of Employees
Compensation and Ownership
Employee Reward and Incentive Plan
Controlling inventory
Providing service
Security Systems
Regulatory Compliance
Risk Analysis
Financial Plan
Start-up costs
Sales Projections
Income Projections

Operations Management



Starbucks Business Plan
In 1971, Starbucks was established with the main aim of selling coffee and coffee products. The company was established in Seattle, and it was publicized in 1992. Today, the company competes in the international markets. Howard Schultz is the founder of the company. He established the company in partnership with other shareholders such as Baldwin, Siegel and Bowker. The company produces customer oriented products,. The company has improved employee management to encourage production of quality products. In addition, the company applies customization strategy, and this has improved the customer loyalty for a long time (Starbucks Website 2012).
Management and Organization Plan
–           Management Team
The management team ensures that the employees have all the resources required in all the processes of the organization. The team delegates duties to the junior employees. Starbucks has a strong team of managers, and this has placed the company at a competitive edge. Starbucks promotes the managers with exemplary performance (Starbucks Website 2012).
–           Recruitment and Selection of Employees
The company recruits people with skills to manage their tasks as well as maintain good relationship with customers. The Baristas should be friendly, attend to details and should be committed to provide quality services to customers. The process of recruiting and selecting the employees is done to identify people with the best skills to work in the company. The process is very strict because the company aims at getting the best workers. In addition, the company has established strategies to attract and retain the most skilled employees in the industry (Robbins & Robbins, 2008).
–           Compensation and Ownership
Starbucks is a public company, and the company sells shares to the shareholders on a regular basis. The shareholders are compensated depending on the performance of the company in a particular financial period. Starbucks is owned by mutual funds and institutions (Starbucks Website 2012).
–           Employee Reward and Incentive Plan
Starbucks applies monetary and non-monetary incentives to reward the employees. Employees with the best performance are appreciated and rewarded. The company has several welfare strategies for the employees. For example, employees are provided with healthcare benefits, plans to purchase stock of the company and other benefits (Starbucks Website 2012).
–           Communication
Starbucks has created good communication with customers, employees and all other stakeholders. Through communication, the top management team has created a good relationship with all the stakeholders. Schultz emphasizes that the company is built on the foundation of creating good communication with people. “We’re not in the coffee business. It’s what we sell as a product but we’re in the people business—hiring hundreds of employees a week, serving sixty million customers a week, it’s all human connection” (Gallo, 2011, p. 1).
–           Infrastructure
Starbucks has installed structures to improve customer satisfaction. For instance, the company introduced infrastructure to support customers to surf at the premises of the company. This strategy was aimed at improving customer satisfaction, and many customers have been attracted and retained (Starbucks Website 2012).
Operations Management
–           Controlling inventory
Starbucks has an efficient system to control the inventory. The company aims at delivering products to customers when they need. The company has liaised with suppliers to ensure that there is enough stock. The company has enough capital to buy adequate stock. The management controls the inventory to ensure that the customers do not lack the products. In addition, the management ensures that there is no excess stock. Regulating stock at the Starbucks warehouses uses the strategy of Just-in-Time system. This means that the supplies are ordered when the demand increases. Changes in demand dictate the amount of supply to be ordered (Starbucks Website 2012).
–           Providing service
Starbucks provides services to customers to ensure that they are comfortable. For example, the company has introduced internet services to allow customers to surf within the premises of the company. The company aims at delivering good services to the customers.
–           Security Systems
There is a need to ensure that security standards are followed. There is a high rate of insecurity, especially from terrorists. This indicates that Starbucks should create security measures to protect the customers, employees and other stakeholders. This can be achieved by monitoring the security issues that may surround the company. The customers should feel secure while on the premises of the company. In addition, the employees should feel secure while at the place of work. This strategy will improve the confidence of the customers, employees and all other stakeholders.
–           Regulatory Compliance
Starbucks operates in the international market, and there are many legal regulations. The company should ensure that the products comply with consumer standards that have been required by many countries. In addition, the company should ensure that it promotes a greener environment. The company should also comply with business competition regulations. The management should ensure that corporate social responsibility is adhered. These strategies will reduce the conflict of interest with the regulatory agencies.
–           Risk Analysis
There is a risk that competitors will overcome the strategies of the company. Starbucks has established many retail stores, and managing the stores is challenging. This may provide the competitors the opportunity to serve the customers with better products. The company also faces the risk of financial changes. The international market has unpredictable market changes. This creates a huge risk to the company.
–           Financial Plan
There should be a balance between the expenditure and revenues. The company should make profits, and this can be achieved by making sales revenue to exceed the expenditure. The company should cut down the costs by improving the efficiency of the production system. The sales can be increased by promoting the products of the company. The financial plan should be geared towards breaking-even, to ensure that the company makes profits.
–           Start-up costs
There are high start-up costs because the capital required to establish a retail store is high. Creating a subsidiary of Starbucks requires a huge capital outlay to develop the structures, to transport the materials and supplies. In addition, there is a need to attract many customers in the area. Therefore, there is a need to conduct the intensive promotion and advertising.
–           Sales Projections
For the last three months, Starbucks has been performing at an increasing rate. The net income for the month of September, October and November, the company has reported sales revenue of $13,299,500, $11,700,400 and $10,707,400 respectively (Starbucks Website 2012). This indicates that the company is performing well, and it is projected that the sales will increase in the future.
–           Income Projections
The performance of Starbucks has been high in the last years. For instance, in the month of September, October and November, the company had net income of $ 1,594,500, $1,419,400, and $1,093,700 respectively (Starbucks Website 2012). This shows that there is a projection that the company will perform better in the future. The earnings are expected to increase because there is an increasing trend in the performance of the company.
Starbucks has been operating for many years, the company aims at providing excellent services to the customers and employees. The management focuses on improving communication with all stakeholders. Starbucks has applied customer oriented marketing plan since it was established. The products of the company are developed to match the needs of the customers. The company also applies niche marketing to serve the market segments which have not been reached. Starbucks produces a wide range of products to capture the demand of as many people as possible. The products are developed to fit the demand of the customers. The company has developed a sales plan of creating many subsidiaries so that many people can access the products of the company. The company has created many retail stores in almost every town. The management team has excellent skills to manage the resources to achieve the maximum benefits possible. The organization has an organization plan, with the chief executive officer being the top leader. There are managers and junior employees. The company has a board of directors to oversee the overall management of the company. Operations are managed by the managers at each subsidiary. Starbucks has achieved success in creating appropriate business models, and has achieved success in achieving high customer loyalty. However, the management of the company should develop appropriate strategies to ensure that the retail stores are established properly. The company should also regulate the number of retail stores so that the customers can achieve maximum satisfaction.

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