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When Schultz first became CEO with Starbucks his goal for the company was to create a “third” space, that space between work and home. Starbucks was founded around the experience and environment of their stores. Starbucks was about a space with comfortable chairs, many power outlets, tables and desks at which customers could work and option to spend as much time in their stores as they wanted without any pressure to buy. The coffee was incidental (Focus: Starbucks, 2010). Over the past few years, it seems that Starbucks had forgotten about this “third” space and the reason for why it became successful to begin with. However, according to Schultz, Starbucks number one priority for the future is to focus once again on the founding purpose of why Starbucks was created to begin with, “to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time” (Mission Statement Starbucks Coffee Company, 2011).
Starbucks Partners
One of the first things that Schultz did that gave inspiration to the members of Starbucks, was to not refer to them as employees but as “partners” of Starbucks. Starbucks offers comprehensive benefits packages to eligible partners working at least 20 hours per week, with 64% of eligible partners currently enrolled (Starbucks Newsroom: Facts about Starbucks and our Partners, 2009). The Total Pay package includes benefits, a 401(k) savings plan, stock options, an employee stock purchase plan and partner “perks” designed exclusively for their partners. These benefits are generous to say the least and is one of the reasons Starbucks has been rated one of the most progressive employers in the U.S. In fact, Starbucks has been named eleven times to FORTUNE’s “100 Best Companies to Work For” list (Starbucks Newsroom: Facts about Starbucks and our Partners, 2009).
Starbucks and their competitors
Until recently, Starbucks did not face the type of competition it is experiencing today because not many companies that were as large as Starbucks were in the gourmet coffee business (Bhaskar, 2010). Starbucks competitors in the coffee beverage sales include 7-Eleven, Dunkin Donuts, Caribou Coffee, McDonald's, Panera Bread, and Einstein Bagels. Competitors such as McDonald's and Dunkin Donuts not only have extensive menus, but also the financial resources and position to leverage their strengths to threaten Starbucks profitability. However, their lack of market expansion has prohibited them from gaining the notoriety Starbucks has achieved (Bhaskar, 2010).
“Starbucks is all about the human connection” - this statement is a powerful representation of what the company represents. The focus on the greater good of the customers is what Starbucks wants to be known for. Originally, this was what gave Starbucks a huge advantage over any potential competitors (Bhaskar, 2010). |
